www.montereycountynow.com AUGUST 21-27, 2025 MONTEREY COUNTY WEEKLY 15 Nearly two decades ago, agricultural industry groups requested that a study be done to compare California’s regulatory costs to other states. Researchers with Cal Poly agreed to examine these costs and were connected with a large Salinas Valley lettuce grower. Cal Poly then followed up with updates to this study, one 12 years later in 2018, and again in 2024, asking the same questions about production costs and taking stock of the regulatory landscape with the same Salinas Valley lettuce grower. In that period of time, they found that costs had grown drastically—mostly in the realm of regulatory compliance—without corresponding increases in revenue. Regulatory costs increased by 1,366 percent since 2006, versus a 44.4-percent increase in total production costs. The grower, who was promised anonymity because they shared proprietary data, had over 1,000 acres in lettuce, Monterey County’s second most valuable crop after strawberries in 2024. According to the report, regulatory costs are now 12.6 percent of total production costs, while the amount the farmer receives for the product at the farm gate (not including transportation processing, distribution or retail markups) for lettuce increased only 0.37 percent from 2017 to 2024. Among the drivers: changes to water quality and management, labor requirements, emissions regulations and, precipitated by the E. coli outbreak in spinach in the Salinas Valley after the original 2006 report, changes to food safety compliance. E. coli outbreaks led to the Leafy Greens Marketing Agreement, requiring growers to conduct environmental risk assessments, test water and soil amendments and follow food safety plans, among other requirements. These rules got tighter over time, reinforced federally in 2011, with more updates after outbreaks in lettuce in 2018 and 2019. Costs jumped from $0.64 per acre in 2006 to $244.15 per acre in 2024, one of the steepest proportional increases, accounting for 15 percent of compliance costs. Among the other top drivers of cost increases are labor regulations. Workers’ compensation, required by all California employers to cover workplace injuries, have risen dramatically over time, even though the rules for calculating premiums haven’t changed since 2017. For example, workers’ compensation costs for the grower increased from $58.94 per acre in 2006 to $428.40 per acre in 2024. And the agricultural landscape continues to change rapidly, as operational expenses are starting to be reshaped with automation and the use of AI in specialty crops. A recent study published by Western Growers Association found that farms adopting laser weeder technology cut costs by around 40 percent in their first year in crops like spinach, cilantro and other leafy greens. Norm Groot, executive director of the Monterey County Farm Bureau, adds that the Sustainable Groundwater Management Act, which aims to bring overdrafted basins into balance by 2040, is expected to add financial constraints in the near future. Crop Cost A Cal Poly study follows one Salinas Valley lettuce grower to reveal cost increases squeezing farmers. By Katie Rodriguez One of the top cost drivers, according to the Cal Poly study, was labor regulations related to sick leave, overtime and wages. Labor costs per acre rose from $1.36 in 2006 to $425 in 2024. NEWS Regulatory costs increased by 1,366 percent since 2006. PARKER SEIBOLD
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